W.W. Williams Midwest, Inc. v. Lien Waver

Filing 76

OPINION ; signed by Judge Robert Holmes Bell (Judge Robert Holmes Bell, kcb)

UNITED STATES DISTRICT COURT F O R THE WESTERN DISTRICT OF MICHIGAN S O U T H E R N DIVISION

W .W . WILLIAMS MIDWEST, INC., P l a in tif f , F ile No. 1:08-CV-410 v. H O N . ROBERT HOLMES BELL L IE N WAVER, her engines, tackle, and gear, D e f e n d a n t. / OPINION P lain tiff /C o u n ter -D e f e n d a n t W.W. Williams Midwest, Inc. ("Williams") filed this ac tio n against the Lien Waver, a vessel, seeking payment of the balance due on Defendant's a c c o u n t for labor and materials furnished to the Lien Waver for the repair of its engines. D e f en d a n t filed a Counter-Complaint alleging breach of contract and violation of the M ic h ig a n Consumer Protection Act, Mich. Comp. Laws §§ 445.903(e), (n), (s), and (bb). This matter was tried to the Court on June 29-30, 2009. The Court makes the fo llo w ing findings of fact and conclusions of law in accordance with Fed. R. Civ. P. 52(a). I. W illia m s is an Ohio corporation with an office and place of business in Kent County, M ic h ig a n . Williams's business includes the repair of marine diesel engines.

D e f en d a n t/C o u n te r-P la in tif f Lien Waver (the "Vessel") is a 43 foot Viking rec rea tio n a l vessel purchased new in 1996 by the Fickle Miss Corporation, a Delaware c o rp o ra tio n , for use by the Schwendener family. Michael Schwendener ("Schwendener") is the Vessel's managing agent. The Schwendeners have owned several large recreational vessels over the years and they take great pride in the condition of their vessels. From the time the Schwendeners p u rc h a se d the Lien Waver they had it serviced by Williams, first through Williams's Detroit a r e a facility, and then through Williams's Grand Rapids and Frankfort facilities. The S c h w e n d e n e rs had a positive relationship with Williams prior to the repairs at issue in this case. The Schwendeners generally use the Vessel from May 1 to November 1. The Vessel is stored during the winter months in a heated building at the Northport Bay Boat Yard (" N B B Y " ), in Northport, Michigan. In the summer of 2004, Michael Schwendener developed concerns about the Vessel's e n g in e s based upon his understanding that the Vessel's 692 Detroit Diesel engines had a c o o lin g design deficiency and defective top rings that tended to wear out prematurely. S ch w en d en er knew of a similar vessel whose engines were rebuilt because the top rings were c lo s e to failure. Schwendener's concerns were also based upon his observation that the e n g in e s were emitting black smoke and using oil, and his observation that Vessel had e x p e rie n c e d a slight loss of power and a drop in engine rpm.

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In August of 2004 Schwendener contacted Williams to discuss repairs to the Vessel's e n g in e s. Don Winters, a mechanic employed by Williams at its Frankfort facility, examined th e engines and confirmed that the top rings were failing. Winters and Schwendener d iscu ssed the option of removing the engines from the Vessel during repairs. Schwendener, in an exercise of caution, elected to have the engines removed. On August 24, 2004, Williams submitted a quote in the amount of $32,768.24 for p a rtia l rebuilding of the engines. (Ex. 1.) Schwendener contracted separately with NBBY to cut the hard top off the Vessel and to hoist the engines out of the Vessel for $13,000. S c h w e n d e n er's agreement with NBBY did not include disconnecting or reconnecting the e n g in e . Accordingly, Williams amended its quote to include an additional $6,048.00 to re m o v e and install the engines. The total price for the amended quote was $38,816.24. (Ex. 3 .) The amended quote included the following comments: This quote is for rebuilding both port and starboard engines on the Lein [sic] W a v e r. This includes teardown, clean up and repair as follows: This includes re b u ild in g of Heads, repairing injectors as needed. Replacement of cylinder k its , remove and reseal blower to block. Coolant update. This will be co m p leted at our Frankfort facility. The engine will be painted before delivery t o site. This does not include replacement of turbo chargers . . . . Due to c o m p a n y policy, I will require 1/2 payment down and remaining balance due u p o n completion of work.

(E x . 3.) Schwendener added the following language to the quote: "1) All parts to be re tain e d . 2) Work to be completed by Sept. 13th." (Ex. 4.) Schwendener signed the quote o n August 31, 2004, and made a $10,000.00 down payment.

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W in te rs contacted Schwendener soon after the quote was signed to advise that he w o u ld not be able to complete the repairs by September 13. Schwendener had wanted the w o rk done by that date so that he could take a boat trip with his father to the North Channel b e f o re the weather turned. However, he was not too concerned about the delay because it w a s more important to him to have the work done properly. Winters performed the majority of the work of rebuilding the engines, with assistance fro m Dale Hendershot, a mechanic from Williams's Grand Rapids facility. However, work o n the cylinder heads and injectors was contracted out to AIS Engine Corporation in Grand R a p id s . Winters has over forty years of experience in repairing diesel engines. Following his w o rk as an engine man for the Navy, he worked for Peninsular Diesel (n/k/a Detroit Diesel), L u e d tk e Engineering, and Williams. Winters has attended more than a dozen diesel training c la ss e s during his career. Three quarters of Winters' work at Luedtke Engineering consisted o f marine work involving tug boats and construction equipment with underwater engines. H a lf of Winters' work for Williams since the early 1990s consisted of marine engine work. W in te rs began painting the engine with paint he received from NBBY. When he saw th a t the paint did not match, he obtained Schwendener's paint specifications and ordered the s p e c ia l two part paint from Kaskinen Auto Supply. Winters completed the engine work and the reinstallation of the engine on September 2 9 , 2004. Winters, Paul Schwendener (Michael's father) and Mark Holtz, the owner of

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N B B Y , took the Vessel out for a sea trial on September 30, 2004. The engines ran well. M ich a e l Schwendener acknowledged that when he spoke with Winters after the sea trial, W in t e rs was happy and excited about how well the engines were running. Mark Holtz also th o u g h t the Vessel ran fine during the sea trial. On September 28, 2004, Williams sent S c h w e n d e n e r an invoice detailing the completed work and showing a total balance due of $ 2 8 ,8 1 6 .2 4 . (Ex. 12.) O n the first weekend in October, Schwendener scrubbed the Vessel and noticed light h a irlin e cracks in the cockpit gel coat. He also noticed that the paint job in the engine room w a s rough, with numerous air bubbles and drip marks, and a creamier color of paint than the o rig in a l. He took the Vessel to Drummond Island the following week and noticed coolant le a k ag e in the engine room. Later in the month, after taking the Vessel on a trip down the N o rth Channel to the Benjamin Islands, Schwendener called Winters to report that coolant w a s running into the bilge. Winters told Schwendener that during the break-in period leaks w e re expected, and that he needed to run the engine hard. Williams sent Schwendener an inv o ice on October 18, 2004, for a total balance due of $28,901.80. (Ex. 13.) On October 21, 2004, in response to Schwendener's complaint that there was exhaust in the cooling system, Dale Hendershot, the other Williams mechanic who had worked on th e engines, examined the Vessel. Hendershot noted that the radiator cap was bad.

H e n d e rs h o t advised Schwendener that Williams would replace the fuel pump even though

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it had nothing to do with the engine repair, and that it would replace both radiators caps when the fuel pump was replaced. (Ex. 14.) In late October Schwendener began directing his calls to Dale Fox, the field service s u p e rv is o r at Williams's Grand Rapids facility. Schwendener told Fox that he was concerned th a t there might be a problem in the head or a gasket. He also recited concerns about the c o lo r of the paint, oil leaks, coolant leaks, and grit on the dip stick. Schwendener sent oil s a m p le s to Williams for testing. After receiving the testing results, Fox told Schwendener th a t there were abnormally high levels of metals in the oil. On November 15, 2004, Fox sent Schwendener a memo outlining the additional work W illia m s was proposing to do to complete the work on the Vessel, and requesting payment if the proposal was acceptable. (Ex. 15.) The additional work Williams proposed to do was to test for compression in the coolant. Because the compression testing needed to be done w h ile the engine was running, Williams proposed to do the work in the spring when the boat c a m e out of storage. Williams also agreed to have the warranty commence when the boat w a s launched in the spring of 2005. Williams sent Schwendener another invoice dated N o v e m b e r 15, 2004, which showed the total due of $28,789.35. The invoice stated: Customer reported that the starbord engine was pushing coolant out overflow. T h e re is an oil leak on starbord engine at the turbo. There is a shifting lag in th e port engine. Both port and starbord engines have oil and coolant leaking c a u s in g staining of paint. Testing for compression in coolant will be tested w h e n boat is launched. Boat is stored for the winter and will be under w a rra n ty when boat is launched. Warranty will commence upon launch of b o at in spring (estimated date is May 15, 2005.)

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(E x . 16, 11/15/04 Invoice.) Schwendener did not pay the bill. Instead, on December 7, 2004, he sent Plaintiff a m e m o r a n d u m of thirteen open items that, according to Schwendener, required corrective w o rk : 1) 2) 3) 4) 5) 6) 7) 8) 9) S tar b o a rd engine exhaust leak in coolant. T re a t and flush carbon out of starboard engine. P ro v id e new coolant. R e p la c e carboned plastic expansion tank and tubing. L o w fuel pressure alarms have sounded on both engines after a few h o u rs of continuous operation. P a in t engines to specifications with Glacier white #8000 (PPG # 2 1 6 6 7 1 6 3 8 9 ) paint. P o r t engine/transmission is slow to engage. A cable adjustment may be n e c e s s a r y. P r o p e r l y support and fasten all cables and wires, and provide proper c h a fe protection. B o th engines have several oil leaks (each side, front & rear). Note: Port engine is spraying an oil mist on the bilge floor near the front p u l l e y. P r o v id e oil and coolant sample results. R eta in all used parts to present to D.D. Provide 6 month guarantee from acceptance of engines. It appears the cockpit gel coat has been damaged from the black runner layed down last summer. When the exhaust manifold was removed, it w as placed on the runner.

10) 11) 12) 13)

(E x s . 19, B.) In the spring of 2005, when Williams returned to work on the Vessel, Williams d is c o v e re d that the compression problem was caused by the injector tubes; the cylinder head th a t Williams had installed either had a defective injector tube or the people who rebuilt the h e a d had installed it improperly. In May 2005 Williams replaced the injector tubes. On June

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7 , 2005, Williams sent Schwendener the warranties on workmanship and parts and the results o f the November oil testing. (Exs. 17, 18.) The warranties were to take effect July 5, 2005. (E x . 18.) As of June 7, 2005, Williams considered its work complete. Nevertheless,

S c h w e n d e n e r continued to express dissatisfaction regarding the repairs. John Talbot, W illia m s 's customer support manager, began fielding Schwendener's calls. In the course of h is discussions with Schwendener, Talbot suggested that Schwendener obtain quotes for re p a in tin g the engines and repairing the gel-coat. Talbot wanted the quotes so that he could m a k e an informed decision on whether to absorb the cost even if Williams was not re s p o n s ib le for the perceived problems. On September 16, 2005, Michael Schwendener sent a memorandum to Talbot with a $3,731.70 estimate for gel coat repair, and a $5,012.70 estimate for repainting the engines. S c h w e n d e n er also sent the results of oil samples from the two engines, and a list of nine open ite m s that he felt still required repair. (Ex. B.) The independent oil sampling company re p o rte d that the silicon and wear metal levels were high, possibly from normal break-in, and re c o m m e n d e d that the oil be re-sampled at the next oil-drain interval. (Id.) O n September 19, 2005, Talbot asked Winters to handle item 8 on Schwendener's a m e n d e d list of open items ("Properly support and fasten all cables and wires, and provide p ro p e r chafe protection."), to make a list of all leaks, and to note what was properly c a te g o riz e d as warranty work and what was not. (Ex. 19.) Based upon Winters's response,

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T a lb o t determined that some of the leaks were attributable to the sight glass, which was o u ts id e the scope of Williams's work, that some minor oil leakage from the engine was n o r m a l and to be expected, and that the oil usage was within Detroit Diesel specifications. T a lb o t concluded that Williams had addressed the warranty issues, and that the remaining is s u e s either could not be found, or were not covered by the warranty. On October 5, 2005, Winters made a service call and tightened some clamps and bolts o n the Vessel. (Ex. 20.) Winters also checked on the paint and concluded that the color on th e underside of the I-beams was the same as the engine, but that the paint on the deck was w h ite r. Talbot was not concerned with this difference in paint color because Williams had p a i n te d the engine according to Schwendener's specifications, and Williams had not been re sp o n s ib le for painting the deck while the engine was removed. The following day W illia m s sent Schwendener an invoice reflecting a total amount due of $30,285.48. (Ex. 2 1 .) 1 During a November 5, 2005, conversation, Talbot told Schwendener that the estimates f ro m the Irish Boat Shop for the gel coat and the paint were too high. Schwendener u n d e rs to o d that Talbot was still intending to inspect the Vessel, and that he would be taking s o m e action regarding Schwendener's paint and gel-coat complaints. Talbot, on the other h a n d , testified that as of November 5, 2005, he did not believe that Williams was responsible

The total balance due as reflected on the October 6, 2005, invoice was more than the a m o u n t reflected on the previous invoice. The increase may include price increases on parts. H o w e v e r, in this suit Williams is only claiming a principal balance due of $28,816.24, the am o u n t reflected on the September 29, 2004, invoice. (Ex. 12.) 9

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f o r the paint, the gel coat, or any of the other remaining items on Schwendener's list, and he d id not think he left Schwendener with the impression that Williams was going to handle it. H e did not, however, explicitly advise Schwendener that Williams would not take any further a c tio n on Schwendener's complaints. Talbot made several attempts to reach Schwendener a f te r this date, but Schwendener did not return his calls. At the beginning of 2006 Talbot tu rn e d the invoice over to Williams's credit department for collection. In April 2006 Schwendener left a telephone message for Talbot, advising him that the V e ss e l was in the water. (Ex. M.) In June 2006, Talbot called Schwendener and left a m e s s a g e that they were playing phone tag and that his next step was to meet Michael S c h w e n d e n er at the Vessel. (Ex. 25.) No meeting ever occurred. On February 12, 2007, W illia m s 's general counsel sent a certified letter to Schwendener asking him to contact her w ith any pertinent information that would explain his refusal to pay the invoice, and advising th a t she was authorized to proceed to suit on this matter. "u n claim ed ." (Ex. 26.) In September of 2007, Winters retired from Williams and Williams closed its F ra n k f o rt facility. The parts Winters had removed from the Vessel were discarded. On October 12, 2007, and again on October 19, 2007,Williams left messages with S c h w e n d e n er to call. Schwendener left a message with Williams on November 8, 2007. (Ex. 2 5 .) The letter was returned

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W illia m s commenced this action on May 2, 2008. (Dkt. No. 1, Compl.) The Vessel w as arrested on May 20, 2008. (Dkt. No. 10, Warrant Return.) Defendant filed a counterc o m p lain t on July 28, 2008. (Dkt. No. 18, Countercl.) At his deposition, Schwendener told T a lb o t that he was making a big mistake and that "this will be more expensive than it is w o r th ." II. I n this action both Williams and Defendant are seeking damages for breach of the A u g u s t 31, 2004, contract for the repair of the Vessel's engines. (Ex. 4.) Williams contends th a t Defendant breached the contract by failing to pay for the repairs to the Vessel's engines. D e f e n d a n t contends that Williams is not entitled to payment and is instead indebted to D e f e n d a n t for breach of contract because its repairs did not correct the original complaint, its repairs were untimely, its work was defective, and its work caused further damage to the V e ss e l. Defendant also contends that it is entitled to damages under the Michigan Consumer P ro te c tio n Act (MCPA), Mich. Comp. Laws §§ 445.901-.922. The parties do not dispute that they had a valid contract for the repair of the Vessel. T h e contract is maritime in nature and is governed by the substantive law of admiralty. K o s s ic k v. United Fruit Co., 365 U.S. 731, 735 (1961) (holding that a contract to repair a ship is within admiralty jurisdiction). When there is no federal statute or well-established rule of a d m ira lty addressing the dispute, admiralty law may look to the common law or to state law, e ith e r statutory or decisional, to supply the rule of decision. Princess Cruises, Inc. v. Gen.

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E le c . Co., 143 F.3d 828, 834 (4th Cir. 1998). The parties in this case have chosen to apply M ic h ig a n law. The Court will do the same. A. BREACH OF CONTRACT T h e contract provides that the remaining balance is due "upon completion of work." (E x . 4.) "`As a general rule, there is implied in every contract for work or services a duty to p e r f o rm it skillfully, carefully, diligently, and in a workmanlike manner." Nash v. Sears, R o e b u c k & Co., 174 N.W.2d 818, 821 (Mich. 1970) (quoting 17 Am. Jur. 2d Contracts § 371, pp. 814-15). The level of skill required is "that degree of skill, efficiency, and k n o w le d g e which is possessed by those of ordinary skill, competency, and standing in the p a rtic u la r trade or business for which he is employed." Id. "Michigan follows the substantial p e rf o rm a n c e of contract rule." Gibson v. Group Ins. Co., 369 NW2d 484, 486 (Mich. Ct. A p p . 1985) (quoting 6A Michigan Law & Practice, Contracts, § 314, pp 315-316). "A c o n tra c t is substantially performed when all the essentials necessary to the full accom p lis h m e n t of the purposes for which the thing contracted has been performed with such a p p ro x im a tio n that a party obtains substantially what is called for by the contract." Id. W h e re there is substantial performance, minor deficiencies in performance do not cause the s u b s ta n tia l performer to forfeit rights under the contract. Id. Williams contends that it substantially performed the contract by October 5, 2005, at th e latest, when Winters made the last adjustments to the Vessel. Defendant, on the other h a n d , contends that Williams has not yet substantially performed the contract because: (1)

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th e repairs were not completed on time; (2) the engines still do not run well; (3) there are oil a n d coolant leaks; (4) Defendant caused spider cracking of the gel coat; (5) Defendant used t h e wrong color paint and applied the paint in an unworkmanlike manner; (6) there are a b n o rm a l levels of metal in the oil and grit on the dipstick; and (7) Defendant failed to retain th e parts. 1. Timeliness A lth o u g h the contract provided that the work was to be completed by September 13, 2 0 0 4 , Schwendener conceded at trial that he advised Williams that the quality of the work w a s more important to him than the specific completion date. Moreover, the proposed c o m p le tio n date was tied to his desire to take a boat trip to the North Channel before the w e a th e r turned. He was able to make that trip in the fall of 2004, so the two-week delay did n o t substantially impair his interests under the contract. 2. Engines S c h w e n d e n er testified that the engines do not run as well as they should and that the rp m s drop at full throttle. There is no dispute that the engines ran well during the sea trial o n September 30, 2004. The engines have not been examined or repaired by any mechanic s in c e Williams's work in 2004 and 2005. The only mechanical repairs that have been p e rf o rm e d on the Vessel since 2005 were the replacement of the block engine heaters in Ja n u a ry 2009, a repair that was unrelated to Williams's work. Schwendener is not a

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m e c h a n ic, and he offered no expert testimony that his perceived drop in rpms is not within a c c e p ta b le limits, or that it is evidence of faulty repairs. 3. Oil and Coolant Leaks S c h w e n d e n er testified that ever since the engines were repaired, he has experienced o il and coolant leaks. There is no dispute that some of the initial leaks were associated with the faulty in je c to r tubes. Williams replaced the injector tubes in May of 2005. Some of the leaks since th a t time are associated with the sight glass, which was not within the work performed by W illia m s . The photographs and the soak pads Defendant offered into evidence to show the e x te n t of the leakage were from June 2009, four years after the May 2005 repairs. Defendant o f f e r e d no photographs or physical evidence from any time close to the time of the repairs. W in te rs and Talbot examined the photographs and opined that the leakage appeared to be part of the normal operation of the Detroit Diesel engines. All those who had k n o w le d g e of Detroit Diesel engines, including Defendant's witness Randall Wrubel, a serv ice manager for AIS Engine Corporation, testified consistently that diesel engines are k n o w n to leak some oil. The Vessel's oil consumption as reported by Schwendener is within th e Detroit Diesel specifications for the engine. Wrubel testified that some of the oil in the p h o t o g r a p h s appeared to be excessive, but he gave no opinion as to the origin of the leaks, th e cause of the leaks, or whether the leaks were related to the work performed by Williams. D e f e n d a n t has not had any mechanic other than Williams examine the Vessel's engines, so

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h e has offered no expert testimony as to whether the oil drips are abnormal, what caused the d rip s , or whether they are related to Williams's 2004 repairs. It appears to the Court that S c h w e n d e n e r is excessively concerned about minor cosmetic matters in the engine room. E v e n if some of the oil leakage is excessive, it can just as plausibly be attributed to the p a ss a g e of four years' time since Williams replaced the injector tubes, and to the fact that W illiam s only performed a partial overhaul of the engines, and some parts of the engines are n o w thirteen years old. Defendant has not met its burden of showing by a preponderance of th e evidence that the leaks are caused by Williams's failure to perform the repairs in a w o rk m a n lik e manner. 4. Gel Coat Spider Cracking S c h w e n d e n er testified that there was no spider cracking in the cockpit before the re p a irs , and he concluded that the cracking must have been caused by Winters when he p la c e d parts of the engine on a black mat on the white gel coat. There was no definitive testimony about what the likely cause of the spider cracking m ig h t be. Theories ranged from torquing, to impact, to heat, to normal wear in a high traffic a re a . Mark Holtz of NBBY testified that spider cracking in 1996 vessels is common, usually b e c au s e of stress. Jeffrey Powlowski of the Irish Boat Shop similarly testified that spider c ra c k in g was not unusual, but that in his experience, impact was the most common cause. P o w lo w s k i had no idea what caused the spider cracking on the Vessel. Talbot testified that

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h e supposed that the cracking was attributable to the fact that this was an old boat and an area o f high traffic. The Vessel was eight years old in 2004 and the spider cracking was found in a high tra f f ic area of the vessel. The Vessel was also subjected to major work during the relevant t im e period, including the removal of the hard top of the boat, and the hoisting out and re in s ta lla tio n of the engines. Williams was not the only company performing work on the b o a t during the relevant time period. Defendant has not shown by a preponderance of the e v id e n c e that Williams caused the spider cracking. 5. Paint D e f e n d a n t contends that the paint was the wrong color and that it was not applied in a workmanlike manner. W in te rs testified that he obtained paint specification numbers from Schwendener and h a d the paint mixed according to Schwendener's specifications. Schwendener testified that h e did not provide specification numbers; rather, he told both Fox and Winters that they s h o u ld call Johnson Towers with questions about the paint. (Exs. C, D.) The Court finds th a t Winters obtained the paint specification numbers either from Schwendener or from Jo h n s o n Towers. Either way, the specifications were those authorized by Schwendener. W illia m s also had Kaskinen Auto Supply remix the paint three additional times according to Schwendener's specifications in order to be sure that the paint had been mixed correctly. J e f fre y Powlowski of the Irish Boat Shop provided an estimate in the amount of

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$ 5 ,0 1 2 .7 0 to repaint the engines. He did not recall anything wrong with the engines that w o u ld require repainting, but he testified that he regularly gives quotes on optional work. M r. Holtz from NBBY did not observe any defects when he inspected the engine room. Schwendener was the only one to testify that the engines were not properly painted. S c h w e n d e n er testified that because he went to the expense of removing the engines, he w an ted the rebuilt engines to look brand new. The Court finds that Schwendener's

e x p e c ta tio n s were not realistic. If Schwendener wanted the engines to look like they came o f f the factory floor, it was incumbent upon him to specify in the quote that he wanted the e n g in e s to be a professionally painted. Instead, he left the repainting of the engines to the d ies e l mechanic. It is not realistic to expect rebuilt engines painted by a diesel mechanic in a n eight year old Vessel to appear brand new. B a se d on the pictures and the painted engine parts produced at trial, the Court finds th a t there was some variation in the color of the paint and some evidence of dripping. The C o u rt is nevertheless satisfied that the quality of the paint job was within the degree of skill, p o s s e s s e d by those of ordinary engine mechanics. 6. Grit on Dipstick and Metal in Oil Samples D e f en d a n t produced evidence that there is grit on the dipstick from the port engine. D e f en d a n t has not had the grit examined, and none of the witnesses could identify what the g rit is or where it comes from. Winters speculated that it might have come from within the e n g in e when the engine was tipped during the overhaul process. Talbot testified that specks

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o n a dipstick are normal and not detrimental. He thought it looked like carbon build-up, and d ie se l engines are known for carbon build-up. Wrubel testified that there could be any n u m b e r of causes for grit on the dipstick. He offered no opinion as to the cause of the grit o n the Vessel's dip stick, whether it was the result of Williams's work, or whether it would h a v e any effect on the operation of the Vessel. There is no evidence that the grit on the dip s t i c k has caused or is likely to cause any trouble to the engine or to the operation of the V e s s e l. Defendant has also produced evidence that oil samples from October of 2004 showed a n abnormal level of tin and that oil samples from July of 2005 showed abnormal levels of tin and silicon. (Exs. 18, B.) The independent laboratory that conducted the oil sampling did not indicate that the leve ls were in the critical category. Although the levels were above normal, the laboratory in d ic a te d that they could possibly be from normal engine break-in, and recommended re s a m p lin g at the next oil drain interval. Defendant's witness, Mr. Wrubel, confirmed that it is common to have elevated levels o f metals in oil samples following a partial overhaul of an engine. Talbot testified that the a b n o rm a l tin and silicon readings were not of concern to him because Detroit Diesel re c o m m e n d s a 500 hour break-in period for this two-cycle engine, and the Vessel had not c o m e close to logging that number of hours after the engine repairs.

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D e f en d a n t has produced no evidence of any additional oil sampling, nor has he p ro d u c e d any evidence that the sampling results were associated with any engine malfunction o r with any improper workmanship by Williams. 7. Retention of Parts D e f en d a n t's complaint regarding Williams' failure to retain engine parts is a red h e rrin g . Schwendener testified that he wanted the parts retained so that he could see if D e tro it Diesel would participate in the repair cost. However, Schwendener never asked to r e tr ie v e the parts in the three years that elapsed before Williams finally disposed of the parts. E v e n if the Court considers all of Defendant's complaints together, the Court c o n c lu d e s that Plaintiff has established that it is entitled to payment under the contract. W in te rs , who performed the majority of the repairs, is well-qualified in marine diesel en g ines . He impressed the Court with his competence and candor. All major repairs were c o m p le te d and the Vessel was available to the Schwendener family to use from July of 2005 o n . The Schwendeners have continued to operate the Vessel every year since Williams re p a ire d its engines, and they have operated the Vessel in essentially the same manner as they o p e ra te d it in years past. They have not had any further repairs done to the Vessel. They h a v e not had any experts examine the Vessel's engines, and they offered no expert testimony that the workmanship was below industry standards. To the extent that Schwendener's co m p lain ts can be traced to Williams's work, the complaints are cosmetic in nature and are " p r o b l e m s " only because Schwendener is a perfectionist, not because they are "problems"

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u n d e r industry standards. The Court is satisfied that Plaintiff established by a preponderance o f the evidence that it substantially performed the work required under the contract in a w o rk m a n lik e manner and that it is entitled to be paid. Defendant has requested recision of the contract and damages due to Plaintiff's failure to substantially perform its contractual obligations. Because this Court has determined that Plaintiff substantially performed its contractual obligations, Defendant is not entitled to either re c is io n or damages for breach of the contract. B. MICHIGAN CONSUMER PROTECTION ACT D e f en d a n t also seeks damages for Plaintiff's alleged violation of the Michigan C o n s u m e r Protection Act (MCPA), Mich. Comp. Laws §§ 445.901-.922. The MCPA makes u n la w f u l unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of tra d e or commerce. Mich. Comp. Laws § 445.903(1). Defendant alleges that Plaintiff v io late d the following provisions of the MCPA: (e) Representing that goods or services are of a particular standard, quality, or g rad e, or that goods are of a particular style or model, if they are of another. (n ) Causing a probability of confusion or of misunderstanding as to the legal rig h ts , obligations, or remedies of a party to a transaction. (s ) Failing to reveal a material fact, the omission of which tends to mislead or d e c eiv e the consumer, and which fact could not reasonably be known by the co n su m er. (b b ) Making a representation of fact or statement of fact material to the tra n sa c tio n such that a person reasonably believes the represented or suggested s ta te of affairs to be other than it actually is. M ic h . Comp. Laws § 445.903(1)(e), (n), (s), (bb).

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I t appears that in its attempts to address Mr. Schwendener's concerns, Williams c re a te d some ambiguity about the extent to which it would resolve the open items on S c h w e n d e n e r 's list, such as the paint and the gel coat. However, the Court finds that those m is u n d e rs ta n d in g s concerned matters that went beyond the scope of the contract. Williams p e rf o rm e d the work required under the contract in a workmanlike manner, and was entitled to payment. The misunderstandings about what Williams would or would not do to resolve S ch w en d en er's remaining concerns about the paint and gel coat were not unlawful, unfair, u n c o n sc io n a b le , or deceptive. They did not affect Schwendener's rights under the contract o r his duty to pay for the engine work that was done. Defendant has not established any of i ts claims under the MCPA by a preponderance of the evidence. Accordingly, the Court f in d s that Williams is entitled to judgment on Defendant's counterclaim. I I I. As a general rule, the correct measure of damages for breach of contract in admiralty o r maritime cases is the amount necessary to put the injured party in the position it would h a v e been in had there been no breach. See Jessica Howard Ltd. v. Norfolk S. R.R. Co., 316 F .3 d 165, 169-70 (2d Cir. 2003) (citing Chicago, Milwaukee & St. Paul Ry. v. M c C a u ll-D in s m o r e Co., 253 U.S. 97, 100 (1920); Seguros Banvenez, S.A. v. S/S Oliver D r e sc h e r, 761 F.2d 855, 860-61 (2d. Cir.1985)). The principal balance due on the September 28, 2004, invoice is $28,816.24. In a d d itio n , Williams contends it is entitled to finance charges in the amount of $19,458.83 from O c to b e r 1, 2005, to June 29, 2009, and continuing at the rate of 1.5% per month ($14.408 per d a y or $432.24 per month). 21

T h e August 31, 2004, contract provides that the balance is due upon completion of w o rk . The September 28, 2004, invoice provides that finance charges of 1.5% per month 2 w ill be applied to all accounts in arrears. (Ex. 12.) The work was completed, at the latest, o n October 5, 2005, when Williams last performed work on the Vessel. Finance charges b e g a n accruing on the contract on October 6, 2005, when Williams sent out its last invoice. T h e Court has calculated the finance charges from October 5, 2005, to the date of this o p in io n at $21,179.76 (49 months x $432.24 per month). Finally, Williams seeks an additional $5,321.05 in expenses arising out of the arrest a n d seizure of the vessel. The contract between the parties does not call for the payment of th e costs of arrest and seizure. Moreover, no proofs were offered at trial as to the amount e x p e n d ed in arresting and seizing the Vessel. Accordingly, the Court will not include the c o s ts allegedly associated with the arrest and seizure in the judgment. In summary, the Court will enter a judgment in favor of Williams in the amount of $ 4 9 ,9 9 6 .0 0 . A judgment consistent with this opinion will be entered.

Dated: November 13, 2009

/s/ Robert Holmes Bell ROBERT HOLMES BELL UNITED STATES DISTRICT JUDGE

Michigan's usury statute does not apply to any "time price differential which may be c h a rg e d upon sales of goods or services on credit." Mich. Comp. Laws § 438.31; Corrigan v . Insilco Corp., 439 N.W.2d 350, 353 (Mich. Ct. App. 1989).

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